September 2026 Monthly Market Summary
Global Market and Economic Summary
September was a mixed month for markets, with equities generally outperforming bonds. Equity performance varied by region, but the main weakness was fixed income, as heightened inflation concerns pushed up expectations for higher interest rates.
Global equities ended September lower, with MSCI World (-1.2%) and MSCI Emerging Markets (-0.5%) both declining over the month. Emerging Markets (EM) again held up better than Developed Markets (DM) and remain well ahead YTD (year-to-date). Regional performance was mixed. Asia was the strongest region, with Japan’s Nikkei 225 (+2.9%) and Korea’s KOSPI (+1.4%) ending the month higher, supported by continued semiconductor and AI-related demand. In contrast, European equities weakened, with MSCI Europe ex UK (-4.7%) and the FTSE 100 (-3.9%) both decreasing, as higher energy prices added to inflationary pressures. In the US, the S&P 500 was broadly flat (-0.3%), while the NASDAQ 100 (+3.3%) ended the month higher, led by Information Technology and Communication Services.
Global bonds came under pressure as higher oil prices increased inflation concerns and lifted expectations for further rate hikes. The US Federal Reserve (Fed) raised its target range by 0.25% to 3.75– 4.00%, its first hike since July 2023, as inflation remained above target while economic and labour-market conditions stayed resilient. US Treasury yields rose over the month as markets priced in further rate increases in 2027, weighing on bond prices. Emerging market local-currency debt (EMD) remained relatively resilient, providing useful diversification within fixed-income portfolios.
Energy prices remained the main macro driver globally. Continued tensions between the US and Iran, with the Strait of Hormuz remaining closed, and disruption to shipping in the Red Sea contributed to a +14.4% rise in Brent crude over the month, pushing prices above $100 a barrel. Prices subsequently eased as flows through Saudi Arabia’s East-West pipeline came through faster than expected.
South African Market Update
The South African Reserve Bank (SARB) raised the repo rate by 0.25% to 7.25%, in line with expectations, following its previous pause. The SARB also revised its inflation outlook higher, expecting headline inflation to peak above 5% in Q4 2026, largely reflecting higher oil-price assumptions. Risks remain skewed towards further interest rate tightening given potentially higher global rates, rising food inflation and potential El Niño-related pressures.
August headline CPI (Consumer Price Index) increased to 4.4% y/y, while core inflation eased to 4.1%. Food inflation remains relatively contained, but higher crude oil prices are expected to result in petrol and diesel price increases of approximately R3.10 and R2.70 per litre respectively in October.
Local economic growth remains subdued, with Q2 GDP contracting -0.2% q/q as mining, manufacturing and trade weighed on activity. Overall, the outlook presents a challenging combination of higher inflation risks and weak economic growth, creating uncertainty for the future path of interest rates and the performance of SA rate-sensitive assets.